Hyundai Steel suspends operations of its Pohang plant due to a decline in demand

Hyundai Steel, South Korea’s second largest steelmaker, has temporarily shut down its No. 2 plant in Pohang due to a prolonged downturn in the industry. This is reported by Korea JoongAng Daily with reference to the company’s statement.

The suspension of production came into effect on June 7. A company spokesperson said that future decisions will be made through discussions with the labor union.

Last November, Hyundai Steel, the steel division of Hyundai Motor Group, announced a plan to close the plant due to low production capacity. However, this decision was later canceled due to strong opposition from the union. However, weak global demand for steel and sluggish domestic market have led to the current complete suspension of the plant’s operations.

In addition, Hyundai Steel plans to sell its heavy engineering division at Plant 1 in Pohang to optimize inefficient business units.

In March of this year, Hyundai Motor Group announced investments in the United States of $21 billion for 2025-2028. They include a steel plant with an electric arc furnace in Louisiana, which will be built by Hyundai Steel. Its annual capacity will be 2.7 million tons.

Hyundai Motor Group has announced plans to raise half of the 8.5 trillion won (approximately $5.8 billion) investment needed to build the steel mill from external investors, with the rest coming from loans. The plant will create more than 1,400 jobs and produce next-generation steel to be used in the automotive sector. POSCO plans to join the project.